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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773
BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Solutions

Chapter
Section
Chapter 9, Problem 16MCQ
Textbook Problem

Which of the following items is a possible example of myopic behavior?

  1. a. Failure to promote deserving employees
  2. b. Reducing expenditures on preventive maintenance
  3. c. Cutting back on new product development
  4. d. Buying cheaper, lower-quality materials so that the company does not exceed the materials purchases budget
  5. e. All of these.

Expert Solution
To determine

Identify the option which is an example of myopic behavior.

Explanation of Solution

Myopic Behavior:

Myopic behavior is adoption of measures to achieve short term objectives neglecting long term growth and survival of the company. Managers adopt such measures to achieve budgeted targets, cost reduction, and reflect better picture of the financial statements.

e.

All of the given options are valid. Therefore, this is the correct option.

a.

Managers delay to promote deserving employees to reduce payroll expenses so that budgeted cost of the department can be achieved. This is not beneficial for the long term growth of organization and reflects short-sighted vision of the management. Therefore, this is a valid option...

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Chapter 9 Solutions

Managerial Accounting: The Cornerstone of Business Decision-Making
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